The Chancellor’s Spring Statement and Brokenshire’s Ministerial Statement 2019
On the 13th of March 2019 the Chancellor of the Exchequer, Philip Hammond, presented the Spring Statement and the Communities Secretary James Brokenshire presented the Ministerial Statement.
In this article, we have focused on the relevant aspects of the documents that relate to housing and development.
The Spring Statement
Philip Hammond said the Government is determined to ‘fix the broken housing market’ with a new £3bn scheme aiming to build 300,000 new homes by the end of this Parliament.
During this time of Brexit uncertainty, it’s difficult to believe that anything could go to plan or be fixed but the Chancellor said his pledges would put the UK on track to raise housing supply to its highest level since 1970.
“Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable.” Hammond told Parliament.
The progress on planning reform…
Hammond announced further progress on planning reform, as set out in more detail in the accompanying written Ministerial Statement by MHCLG’s Secretary of State.
- £717 million would come from the £5.5 billion Housing Infrastructure Fund to unlock “up to” 37,000 homes at sites including Old Oak Common in London, the Oxford-Cambridge Arc and Cheshire
- Through the Affordable Homes Guarantee Scheme (extension of an existing scheme), the Government would guarantee up to £3 billion of borrowing by housing associations in England to support delivery of around 30,000 affordable homes
- A £1bn fund to encourage SME housebuilders announced at the Autumn Budget
The Future Homes Standard
A ‘Future Homes Standard’ would be introduced by 2025, future proofing new build homes with low carbon heating, eliminating fossil fuel sources and achieving world-level leading levels of energy efficiency.
The new standard would build on the Industrial Strategy Grand Challenge mission to at least halve the energy use of new buildings by 2030.
The Government are to take 5 steps in the coming months:
1. Produce an independent report on build-out rates. There will be an introduction to additional planning guidance to support housing diversification on large sites. Sir Oliver Letwin concluded that greater differentiation in the types and tenures of housing delivered on large sites would increase build-out rates.
2. Respond to the consultation on planning reform. There will be an introduction of a package of reforms including allowing greater change of use between premises, and a new permitted development right to allow upwards extension of existing buildings to create new homes.
3. Accelerate the ‘Planning Green Paper’. This would be done by publishing a Green Paper setting out proposals on how greater capacity and capability, performance management and procedural improvements could accelerate the end-to-end planning process.
4. Consult on the consultation on the changes announced at Budget 2018. The changes to lettings relief and the final period exemption, which extends private residence relief in capital gains tax.
5. Consult on Planning for Future High Streets. Look at the options for potential changes to help local areas make better use of planning tools to support their local high streets, including through ‘Compulsory Purchase Orders’, ‘Local Development Orders’, and other innovative planning measures.
Read the full Spring Statement here.
Brokenshire’s Ministerial Statement
The Communities Secretary James Brokenshire MP has hailed millions of pounds in extra funding and new planning measures to build homes, rejuvenate high streets, create jobs and deliver economic growth.
Brokenshire told Parliament, “We’re pulling all the levers available to build homes and opportunities in our communities. These new measures and funding mark our continued commitment to ensuring the housing market works for everyone and economic growth is shared across the country.”
There is to be an independent report on build-out rates and permitted development.
In his Ministerial Statement, Brokenshire said the Letwin Review found no evidence that speculative land banking was part of the business model for major house builders and a consensus has emerged that it is the market absorption rate that determines the rate at which developers build out large sites.
As confirmed in the Spring Statement, Brokenshire’s department will shortly publish additional planning guidance on housing diversification – to further encourage large sites to support a diverse range of housing needs and help them build out more quickly.
Brokenshire agreed with the principle that the costs of increased housing diversification should be funded through reductions in residual land values.
The Government was committed to improving the effectiveness of the existing mechanisms of land value capture, making them more certain and transparent for all developments; his focus was on evolving the existing system of developer contributions to make them more transparent, efficient and accountable and his department is gathering evidence to explore the case for further reform.
Brokenshire would keep the need for further interventions to support housing diversification and faster build-out, including amendments to primary legislation, (under review).
Accelerated Planning Green Paper
The priority was to ensure faster decision-making within the planning system. His department would publish an ‘Accelerated Planning Green Paper’ later this year that would discuss how greater capacity and capability, performance management and procedural improvements could accelerate the end-to-end planning process.
It would also draw on the Rosewell Review, which made recommendations to reduce the time taken to conclude planning appeal inquiries, whilst maintaining the quality of decisions. Brokenshire would consider the case for further reforms to the compulsory purchase regime, in line with the manifesto commitment.
Read our article on The Rosewell Review here.
Permitted Development Rights
MHCLG would amend the shops use class to ensure it captured current and future retail models, which will include clarification on the ability of (A) use classes to diversify and incorporate ancillary uses without undermining the amenity of the area, to introduce a new permitted development right to allow shops (A1), financial and professional services (A2), hot food takeaways (A5), betting shops, payday loan shop and launderettes to change use to an office (B1) and to allow hot food takeaways (A5) to change to residential use (C3).
Additionally, to give businesses sufficient time to test the market with innovative business ideas it would extend the existing right that allows the temporary change of use of buildings from 2 to 3 years and enable more community uses to take advantage of this temporary right. This will enable such premises to more easily locate on the high street and would shortly publish “Better Planning for High Streets” with tools to support local planning authorities in reshaping their high streets. With the intention to create prosperous communities, particularly through the use of compulsory purchase, local development orders and other innovative tools.
MHCLG would take forward a permitted development right to extend upwards certain existing buildings in commercial and residential use to deliver additional homes, engaging with interested parties on design and technical details. It would want any right to deliver new homes to respect the design of the existing streetscape while ensuring that the amenity of neighbours was considered. It would also make permanent the time-limited right to build larger single-storey rear extensions to dwelling houses and to introduce a proportionate fee. Brokenshire would extend the time-limited right for a change of use from storage to residential. This right will lapse on 10 June.
Alongside this, he would review permitted development rights for conversion of buildings to residential use in respect of the quality standard of homes delivered. MHCLG would continue to consider the design of a permitted development right to allow commercial buildings to be demolished and replaced with homes. It would also develop a ‘Future Homes Standard’ for all new homes through consultation in 2019 with a view, subject to consultation, to introducing the standard by 2025.
It would grant a general listed building consent for works to listed waterway structures owned, controlled or managed by the Canal & River Trust.
He intended to implement an immediate package of permitted development right measures in the spring, with the more complex matters, including on upward extensions, covered in a further package of regulations in the autumn.
Oxford Cambridge Arc – Update
On 13th March MHCLG also published an update on the Government’s ‘overarching ambition’ for the Arc, including a joint declaration between Government and local partners, signalling the importance of collaboration to achieve these aims.
The document also provides an early update on the Government’s work to develop a robust economic evidence base for the Arc.
The Government intend to:
- Appoint an independent Business Chair for the Arc shortly to provide expert advice; they would lead an Advisory Group, to be set up by late Spring
- Launch a broad, joint, public engagement exercise over the summer
- Support additional stakeholder engagement, utilising the breadth and depth of our networks of leaders and local partners, as well as Government departments and their agencies, to drive conversations and engagement with groups, communities and businesses across the Arc
- Begin consulting on the route options for the Expressway this autumn with a decision on detailed development of the preferred route to be undertaken in early 2020,
- Complete the analysis into new or expanded settlements and consider where economic and housing growth, including through locally-led plans, could maximise the benefits of new road and rail infrastructure
- Consider how the design of new settlements could support the Industrial Strategy Grand Challenges through the demonstration and deployment of new technologies
- Complete underway assessments on Garden Communities bids, and announce successful proposals in the spring
- Work with the Building Better, Building Beautiful Commission to gather evidence on design and quality place-making to identify opportunities to promote improved design quality and greater community consent (the Commission would publish an interim research report by July)
- Work with local authorities to consider what planning approaches and flexibilities might be appropriate to better support planning an increased housing supply over the long term
Read the full Ministerial Statement here.
Read the Government UK Economy document here.
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